(Table: Prices and Demand) Look at the table Prices and Demand.The New Orleans Saints have a monopoly on Saints logo baseball hats.The Saints sell at most one hat to each customer, and the table shows each customer's willingness to pay.The marginal cost of producing a hat is $18.How many hats should the Saints produce, and what price should the organization charge to maximize its profits?
A)1; $28
B)2; $26
C)3; $24
D)4; $22

Question

Quizplus · Accepted Answer

To maximize profits, the Saints should produce hats until the marginal cost equals the marginal revenue. The third hat can be sold for $24, which is above the marginal cost of $18, maximizing profit.

(Table: Prices and Demand) Look at the Table Prices and Demand.The